Overview
A separate account should be set up for land improvements that have limited lives. They should also be depreciated over their estimated useful lives.
The capitalizable expenditures of land improvements may include the following:
- site improvements such as landscaping that has a limited life (e.g. shrubbery, flowers, trees)
- retaining walls, parking lots, fencing, sidewalks, sculptures, and art work
Special Note: Land Improvements
- When assets near the end of their estimated useful lives, the estimates should be reviewed for accuracy of the original estimate and adjusted to reflect the anticipated number of years of continued use.
- Any adjustment of estimated lives is a change in accounting estimate and should be applied to current and future depreciation calculations.
DEPRECIATION OF LAND IMPROVEMENTS: Normally depreciated over a useful life of 20 years